An excavator works at a surface mine near Salyersville, Kentucky, that is owned by Licking River Resources Inc. A tax on coal supports the Abandoned Mine Lands fund, which is supposed to help restore areas damaged during mining.

Reclamation Money Could Fuel Recovery

While thousands of Appalachian coal miners go unemployed, the federal government is sitting on $2.5 billion that could put them to work. Their jobs could be reclaiming abandoned mine lands and preparing the way for a new regional economy.

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In the poorest part of the poorest region in America, there is nearly $2.5 billion of federal money waiting to be spent. The money, which flows into the Abandoned Mine Lands Trust, comes from taxes that coal companies pay to reclaim old and abandoned strip mines. “Reclaim,” in this context, means to refurbish and reforest the land, getting it as close as possible to its natural state before the land was mined. Additionally, the money is meant to “reclaim” the economy, paving the way for the region to move away from coal.

No one denies what that money could represent to central Appalachia, where in just the last 18 months over 5,500 high paying mining jobs have been lost in Eastern Kentucky alone. The problem is no one can agree on how to spend it. The longer it goes unclaimed, the less likely it is to help the region.

The Surface Mining Control and Reclamation Act (SMCRA), signed into law by President Jimmy Carter in 1977, created a permanent trust to address environmental hazards caused by mining. This Abandoned Mine Lands (AML) fund was to be supported by a tax on every ton of coal mined in the United States. Companies pay 35 cents per ton for surface-mined coal and 10 cents per ton for deep-mined coal. The fund is supposed to pay to fix old problems in cases where coal companies abandoned the land without reclaiming it.

Jack Spadaro was among the first to be hired by the federal Office of Surface Mining, which was created to oversee the new federal surface mining law, known as SMCRA. Before he was forced out of the Mine Safety and Health Administration after exposing a cover-up of the investigation of the 2000 Martin County coal slurry spill, he spent 18 years designing and engineering AML projects throughout central Appalachia. “Initially, we were spending a lot of money and creating a lot of jobs in the coalfields, and [the AML program] was a very effective program,” Spadaro said.

Over time, however, the program became more and more limited. According to many, it has become prohibitively difficult for the average person to gain access to the funds. “It’s almost impossible for anyone in Eastern Kentucky to get their hands on that money,” said Greg Stumbo, Kentucky Speaker of the House. “Congress has kept that money bottled up for 30 years. It’s the hardest money to access….If I knew the answer to [why], I’d probably be the smartest man in America.”

Stumbo points out the jobs theoretically created by reclamation are jobs that miners are uniquely qualified to do. “Most miners can do darn near anything,” he says. “They have to run equipment. They have a great skill-set.”

Spadaro suggests that the fund is dormant and is being used to prop up the federal deficit. “It’s a shame because the original intent of the AML fund was to do reclamation work and to improve conditions in the coalfields, not just for streams and forests but for communities as well. And instead of being used to do that, Congress has set it aside as a hedge against the deficit. And no one, it seems to me, has had the courage to point this out, even though there are many politicians who know what’s going on.”

Photo courtesy of the Kentucky Division of Mine Reclamation and Enforcement

An aerial view of an Apollo Fuels mine near Middlesboro, Kentucky, where vegetation is being established during the reclamation process. Unemployed coal miners have skills to operate equipment used in such reclamation projects.

Many Appalachians complain that the abandoned-mine-lands law distributes money to states that have no abandoned mine lands. The tax is specifically meant to solve old problems, so why, they ask, is the money going to states where these problems don’t exist? Jason Bailey, director of the Kentucky Center for Economic Policy, sees this as one of the major flaws of AML. “So much of the mining happens out West now, and production is dropping dramatically in the Appalachian region,” Bailey said. “The formula, however, does not allocate the monies based on the need. Most of the need [to reclaim abandoned mines] is here. It’s in the Appalachian region.” In 2012, for example, the state of Wyoming received $150 million and used it on infrastructure, schools and conservation programs. To some, this is not what the money was intended for. It could be better spent on jobs that put laid-off miners back to work.

Bailey stresses that AML should help the Appalachian environment in the long term, and in the short term, it should help improve the Appalachian economy. To start, the fund could provide employment for laid-off coal miners. “I think it’s a perfect match between some of the skills that laid-off miners have and some of the jobs that are needed to do [remediation],” Bailey said. “You’re talking about a lot of jobs that have similarities with surface mining.”

Not only could the money help the region immediately, it could show the government is finally acknowledging the problems in post-coal Appalachia, where coal-mining jobs are in sharp decline, Bailey said. “We know that job loss has been happening for a very long time in the coal industry. … If people could see a more tangible example of new jobs created that are accessible to folks who have lost their jobs…it would create a larger sense of hope that a new and hopefully better economy is possible.”

It’s a point echoed by Carrie Ray, Research and Policy Associate of the Mountain Association for Community Economic Development (MACED). “Reclamation…has the potential to be a big job creator, and one that can employ former miners who know how to operate the heavy machinery required to break up the compacted soil, regrade, etc.” Outside the environmental and health benefits of such a cleanup, she says the short-term economic benefits are substantial. “The best use of AML funds would be to put Appalachians back to work on these reclamation jobs.”

Though AML funds have to focus on reclaiming old sites, the Coal Severance Tax is more flexible. That is a state-sponsored tax that Kentucky levies on each ton of coal as it is mined. Ray sees great opportunity for this source of funding, since it was initially designed to be invested in economic development projects. “Miners have skills that can be used in other industries, whether it’s the electrician who gets trained to install energy-efficient lighting or the dozer operator who can operate the heavy machinery needed to replant forests on abandoned mine sites. The key is to provide meaningful work. A person who’s a coal miner because it’s ‘in his blood,’ so to speak, is not going to be fulfilled answering phones at a call center for $10 an hour.” She fears that the funds won’t be spent this way. Her worst-case scenario is that “the money continues to be spent on one-off projects or to fill budget gaps, and in 20 years we find we barely have the money to do even that anymore, much less make the huge investments we need to bring the Appalachian economy around.”

Others concerned about the future of Appalachian coalfield communities have called for creating permanent funds in Kentucky and West Virginia from severance-tax revenue that could help mining communities make the economic transition from coal.

But whether these Central Appalachian states create a new source of funding for economic development, a multi-billion dollar fund already exists in AML. That money could be used to harness a vision of economic rebirth, employing the very people the coal companies laid off. Instead, the money remains unclaimed, while the poorest region in America grows poorer.